Micro finance probe turns to clients

Investigations into the alleged mismanagement of public funds by Micro Finance Institutions (MFI) have taken a new twist with prosecution now turning to MFI clients. To date, a total of 32 people most of who are former managers of the defunct micro finances are under investigations while two have been tried and sentenced. The latest from the Prosecutor General office is that some clients of these MFIs are alleged to have acquired loans illegally. According to the documents made available to Sunday Times, some irregularities are a result of collusion between the institution heads and some clients, which led to the latter acquiring loans through unlawful channels. “That is a criminal offence and such people will be prosecuted,” Prosecutor General Martin Ngoga warned on Wednesday. “We are committed to this exercise and we shall not stop at arresting them. We are going to trace their assets, attach them and seek a court order to sell them to recover the money,” Ngoga said. Sunday Times could not obtain the number of MFI clients who will be brought to book. Several MFIs were forced to shut down in 2006 after they ran short of funds. The Government had to intervene disbursing up to Frw3 billion to compensate people who had deposits in those MFIs. The Government paid depositors up to 50 per cent of their total deposits in those banks. The MFI’s under probe include Ongera, Intera, Urumuli, Gasabo, and Intambwe. Following the closure of the MFIs in question, the government channelled all transactions previously handled by the liquidated banks to Banque Populaire du Rwanda, a local cooperative-cum-commercial bank with branches across the country. Ends